TRUMP UNNERVES JAPAN BEYOND TAX MEASURES

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Trump`s tax measures and the risk of a trade war have rattled markets and concerned countries around the world. Japan is no exception, in particular as it was not exempted from the imposed import duties as other Canada or the EU.

Japan is the only direct G7 victim of Trump`s fight against China but concerns go far beyond the import taxes raised on steel products. Japan exports only 2 percent of its steel production to the U.S. and most of that is high-quality steel that cannot easily be replaced by other suppliers.

Yes, Japan will suffer from an increase of cheap steel flooding from China to other export markets, in particular in Asia. This will lead to further price declines and clearly impact Japanese producers, too.

But the much bigger threat and concern of the Japanese government lies somewhere, it is the fear of being isolated and left alone by the U.S. in Asia.

A year ago I wrote here about Trump`s determined “Divide et impera” foreign policy approach. Let us admit it. It seems to work.

And there is nobody who can less afford it. Japan`s position in Asia depends on a strong ally U.S. But this ally does not attempt to exclude it from the recent import tax measures. This ally is making plans for North Korea talks without involving Japan. This ally does not care about Japan.

Policy makers in Japan are on high alert. I have recently spoken to a number of high-profile foreign visitors interacting with the foreign, defense and other ministers. Everywhere the same concern: What is this Trump thinking? How far will he go? Does America First mean Forget Japan?

At least, the Japanese government is not sitting still completely but rather actively working behind the scenes towards closer cooperation with alikes such as Austrialia or India. But this will not be sufficient if POTUS really continues his erratic journey and isolationist course.